Hybrid rocket propulsion, first demonstrated by the Russian GIRD-09 rocket in 1933, combines liquid oxidizer and solid fuel for thrust generation. Despite numerous advantages, such as enhanced safety, controllability, and potential environmental benefits, hybrid propulsion has yet to achieve its full potential in space applications. In recent years, the research on hybrid propulsion has gained enormous momentum in both academia and industry. Recent accomplishments such as the altitude record for student rockets (64 km), the launch of the first electric pump-fed hybrid rocket, and a successful 25 s hovering test highlight the potential of hybrid rockets. However, although the hybrid community is growing constantly, industrial utilizations and in-space validations do not yet exist. In this work, we reassess the possibilities of hybrid rocket engines by presenting potential fields of applications from the literature. Most importantly, we identify the technical challenges that hinder the breakthrough of hybrid propulsion in the space sector and evaluate the technologies and approaches necessary to bridge the gaps in hybrid rocket development.